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Platform Focus: Cofunds


Cofunds remains the UK’s largest fund platform, offering its services to both advisers and institutions.

Cofunds’ multiple business channels ensure that its sales and AUA growth often far outstrips its competitors. Those advisers seeking the scale comfort blanket will feel reassured by the chunky £64bn AUA (as at 31st December 2013) and an AKG rating of B+. From December 2012 to December 2013, the group added over £16bn of assets to the platform. Cofunds’ AUA percentage increase of 10.03 per cent in the last quarter of 2013 was the sixth largest in the adviser platform market and translated to a £5.84bn absolute increase.

There are caveats to these figures – being a multi-faceted institution, inflows come from both advisory and institutional business, and net sales in the adviser channel are reportedly not so buoyant. We estimate that around half of the AUM is from Cofunds Institutional, which is a lower margin platform player for wealth managers wanting to outsource to a fund supermarket whilst building proprietary adviser portals.

A couple of points on proposition developments. Our research with advisers over 2013 highlighted a regular criticism levied at the amount of paperwork and manual processes required to run business on Cofunds.

Positive developments here include a deeper integration with back office provider Intelliflo, reducing the paperwork and re-keying burden. Some advisers tell us the connection with Distribution Technology works well for them.

Elsewhere, it is less good news if you are an adviser who wants to access ETFs and investment trusts via Cofunds, as plans to tie-up with Barclays Stockbrokers to offer a new investment service are reportedly canned for the time-being. Advisers have told us that platform development roadmaps are long and there is a sense that the platform has fallen behind in terms of model portfolio and general investment functionality.

In April 2013, the platform was acquired in its entirety by life company behemoth Legal & General for a reported £131m. The impact of the L&G acquisition rumbles on and it remains to be seen if the business continues to invest across all channels, including smaller individual adviser firms. Will this be an L&G engine or will new investment give the largest UK platform a new lease of life in servicing smaller advisory firms?

Holly Mackay is managing director at The Platforum

The Platforum’s take on price

Cofunds is an example of a platform with a tiered annual fee and no separate transaction fees, which is competitive for those clients who are actively managed in models, or regularly rebalanced, for example. The recent reduction in Sipp fees has made it more competitive for smaller accounts, it was already competitive for larger accounts.

It is particularly competitive for customers with a Sipp and more than £150,000; however, flat Sipp fees make them less competitive for the sub £100,000 accounts where some newer platforms are more keenly priced. The removal of the annual £40 platform charge was well-received by advisers.

Generally middle of the pack from a pricing perspective – not the cheapest but not top of the range either. Cofunds get more competitive for larger accounts, though the lack of investment trusts and ETFs may be an issue. Check the suitability for your particular customer segment. 

Adviser views: 

“Cofunds are generally our preferred platform for clients with up to £250K. It is competitively priced and the range of investments is good. We also like the financial strength it is profitable and backed by Legal and General. And although they have been enquired by L&G they were not set-up as a Life company spin-off. However, there does seem to be a lot of paperwork with them compared to other platforms.”

Scott Gallacher is director at Rowley Turton

“We have just started using Cofunds again having really gone off them. The systems were slower than competitors and more complicated to use. That was compounded by the support staff not always being able to help resolve usability problems quickly. recently this situation has improve. The business seems to have been streamlined and things are working more effectively. And although the technology is still not as user friendly as some of the other platforms, the support staff are better at dealing with problems.”

Derbyshire Booth Financial Management managing director Greg Heath



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There is one comment at the moment, we would love to hear your opinion too.

  1. “…net sales in the adviser channel are reportedly not so buoyant”

    I recon you are dead right Holly. I do use them and in fairness I think they have one of the best web sites, however compared to the Cofunds of say 4 years ago, their service to advisers (in my experience) has fallen off a cliff. Whether this is due to L&G is a moot point, but (again in my experience) L&G may be many things, but a good service proposition they certainly are not.

    In common with most of the other platforms they are still not able to accommodate sensible adviser charging. Taking it from one fund, from income or from a ‘model’ portfolio is a long way from ideal. Pro-rata sell down across the board is the only thing that really make sense. This is now the third year that I have heard from Cofunds that ‘this is coming soon’. Good job I haven’t been holding my breath! (Some might think it’s a pity I didn’t!)

    As far as institutional investors are concerned I have heard from my contacst that there was dissatisfaction with the charging structure, so the latest revisions in that respect are no great surprise.

    Indeed since (Say) 2010 you would have been a darn site better investing IN L&G than WITH L&G.

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